Is Trading Just Guessing?

Discussion in 'Risk Management' started by macattack, Oct 7, 2011.

  1. yes, trading is about guessing--educated guessing--and then managing that guess.
     
    #101     Dec 22, 2011
  2. Yes that's the one.
     
    #102     Dec 23, 2011
  3. Yes, trading is just guessing. Although I don't have any proof, hey, my guess is as good as yours.
     
    #103     Dec 23, 2011
  4. This comment is a very limited one.

    Who in their right mind would have a chart with the forming bar on the very right edge of the chart? NO one.

    But it us a fact that some people do simply because they rent the wrong and poor platform.

    In a similar fashion another turd in the puch bowl was explaining how to look at future information in the Present.

    When trading, it is always very important to have 10 to 12 leading indicators of price available.

    More important it is very very important to have perfect and available information for exactly timing the market to take its full offer.

    The common source of these two sets of certain information is the mind after you have fully differentiated your mind through growth and hard rational work.

    The differentiation can be handed from one person to another. Gaining the facility to use this full package takes a little time to acquire fluency.

    Certainly very few people can be chosen and even fewer will do the work.

    Why is guessing even on the table?
     
    #104     Dec 25, 2011
  5. ammo

    ammo

    if it were not a guess,you would never have a losing trade
     
    #105     Dec 25, 2011
  6. ssrrkk

    ssrrkk

    It seems that people have different responses to the OPs question because everyone has a different idea about the amount of uncertainty that separates a prediction from a guess. If a prediction has 90% accuracy, then it is likely not a guess for most. However, to others who are extremely risk averse, it is still a guess. For some, a 10% rate of success is considered something worth betting on. Of course, the real answer lies in how much to bet on such a low probability wager and what is the amount of winnings if the bet is correct. If you are risking a mere 5 dollars, but the reward is $5000, then it is worth taking that bet I think to most. Some might reason that with a 10% success rate, you will lose 9 out of 10 times. So on average, given 10 trials, you will likely lose $45. But within those 10 tries, on average you would win once, giving you a net expected win of $4955 in 10 trials. That might be a risk worth taking for most. So all of a sudden, a 10% success rate prediction is no longer a guess to most I think.
     
    #106     Dec 25, 2011
  7. How can something be anything less than 100% accurate and not be a guess?
     
    #107     Feb 29, 2012
  8. soonhwei

    soonhwei

    +1

    if we talk about nature science, we have hypothesis, we gather sample, we observe, if observations are valid, hypothesis -> theory, and we assume its 'fact'. there're outliers that invalid this theory, but we throw these away as its not 'big enough' to invalid the whole theory. usually these outliers are 0.00x% of the total samples.

    so now, if we have a brilliant trading idea, but its only valid/'win' 80% of the time (which is considered very good, of course its R-R ratio is > 1), but will you call it a 'fact'?
     
    #108     Feb 29, 2012
  9. In initiating a trade you can say you are forming an estimation: a kind of "estimated guess" based on certain variables( mathematics, repetitive behavioral psychology, etc ) someone would use to come to a certain conclusion about the possible outcome of something.

    This is the way I think when it comes to pulling the trigger on the buy or sell button.
     
    #109     Feb 29, 2012
  10. ocean5

    ocean5

    What you think is not interesting to anyone
     
    #110     Feb 29, 2012